Discuss Non-Compete Agreements Before You Sign

By Lindsey Novak

February 9, 2017 5 min read

Q: I am under a non-compete agreement and I'm highly experienced in a specialized area. I know other similar companies will also want me to sign a non-compete, but I'm not sure how to handle this since I want to stay in my same field.

A: Non-compete agreements (or non-compete provisions in employment contracts) have become fairly common in the American workplace. According to Patrick J. Boyd and Stephen Bourtin of The Boyd Law Group PLLC (NYC), an unfortunate aspect of these agreements — from the employee's side — is that employees often don't have much, if any, opportunity to negotiate them. If they are not included as part of an employee's offer letter, they will sometimes be tendered to exiting employees, with the understanding that it must be signed to continue working for the company. Though many employees think they should automatically sign the non-compete agreement for fear of not getting the job, Boyd suggests holding a candid, upfront discussion on the agreement's terms at the time it's presented. Employees new to the field won't have this luxury, but highly sought after successful employees might hold more negotiating leverage than they think.

To be legally enforceable, a non-compete restriction must be "reasonable" in its duration, work scope, and geographical reach. For example, a three-year restriction preventing a doctor from practicing medicine throughout the U.S. after her employment with a specific clinic or medical group would be unlikely. The doctor might, though, be successfully restricted from working for a competing type of medical practice within a few mile-radius of the prior employer's offices for a moderate time.

The least enforceable restrictions are those with broad geographic scopes, and durations that attempt to prevent an employee from working for any competitor in a specific industry. Also, restrictions on using confidential, proprietary information or trade secrets of a former employer to work for a competitor are highly enforceable and such acts of "unfair competition" can run the risk of a legal action even in the absence of a written agreement. An overly broad restrictive covenant rarely stands or falls in its entirety. Courts will instead often revise the terms to be more acceptable.

Boyd says they have often seen non-compete restrictions for as long as two-years preventing an employee from being hired by any industry competitor, but it is highly unlikely a court would enforce such a broad restriction. Employers sometimes impose overly broad non-compete restrictions knowing they would be unenforceable. Strategically, they hope to discourage employees from leaving to work for competitors or from soliciting former clients for their new employers.

Employees are often unaware of the standards for enforceability of non-competes, and legal outcomes can vary as to whether the state is pro-employer or pro-employee. California has all but done away with non-compete agreements being very much in favor of employee freedom, while more conservative states are seen as more willing to protect a business's contractual right to restrict their employee's ability to use their gained knowledge to compete against their former employer.

In this context, a simple strategy is for an employee to carefully consider a non-compete as soon as it is presented and confer with an attorney to better understand its implications. Often times, a well-versed employee may be in a better position to negotiate less restrictive terms at the time an employment offer is presented rather than when an employee subject to a non-compete restriction is being let go or voluntarily leaves her job.

Email all questions to [email protected] For more about her, visit www.lindseyparkernovak.com or follow her on Twitter @TheLindseyNovak and Facebook at Lindsey.Novak.12. For past columns, visit Creators Syndicate website at www.creators.com.


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